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Analysis

Seeking the truth about high-deductible health plans

Recent news releases from two very
different organizations paint entirely separate pictures of what can
happen to people once they sign up for a high-deductible health plan.

One
release from Cigna, the giant for-profit insurance firm I used to work
for, would lead us to believe that human resource managers who haven’t
moved all of their company’s employees into a high-deductible plan
should be canned for fiscal ineptness.

The other, from
GiveForward, a Web site where people can create personal fundraising
pages, tells of the real-world consequences when people in
high-deductible plans become seriously ill or get hurt.

One of the
reasons I left my job in the health insurance industry was because I
could not in good conscience continue to promote high-deductible plans,
often marketed as “consumer-driven” plans, as wise choices for most
Americans. These plans, which are often coupled with a health savings
account, have become a favorite of insurance company executives and an
increasing number of employers. That’s because they enable insurers and
employers to shift more and more of the cost of care from them to health
plan enrollees.

Insurers regularly trot out studies, which they
themselves conduct, as part of their ongoing campaign to persuade
employers that haven’t yet joined in, to get with the program. Earlier
this month, for example, my former employer released the results of the
“Sixth Annual Cigna Choice Fund Experience Study.” A press release
crowed that, “When American workers engage in health-smart habits
offered in consumer-driven health plans, they reduced their health risks
and lowered their total medical costs an average of $9,700 per employee
over a five-year period.”

Cigna said it arrived at that figure
from a review of claims submitted during that period by people enrolled
in its consumer-driven health plans (CDHPs). And the good news just kept
on coming. Not only were medical costs lower for people enrolled in
CDHPs, but so were those folks’ health risks. That’s because, according
to Cigna, they received higher levels of care, were “more engaged in
health improvement” and were “more savvy” consumers of health care than
people enrolled in more traditional health plans.

Maybe so, but
studies of the population at large, and conducted by nonprofit
organizations that don’t sell insurance — like the Commonwealth Fund —
have found that high-deductible plans often are exactly the wrong kind
of coverage for many Americans.

The Commonwealth Fund has found
that adults in high deductible plans “have significantly greater
difficulty” accessing care due to cost compared to people in plans with
lower or no deductible, and that people who are very sick are at a
particular disadvantage.

The Commonwealth Fund also discovered
that folks enrolled in high-deductible plans are more likely to
accumulate medical debt, especially those in low-income families.

These
findings are borne out by the experience of the two young people who
founded GiveForward in 2008, Ethan Austin and Desiree Vargas. In the
four years since they launched it, GiveForward has helped families raise
$10 million for out-of-pocket medical expenses.

I first learned
about GiveForward while I was doing research for my column last month
about Sarah Burke, the Canadian skier who died after an accident during a
training session in Utah. Friends of the Burke’s family turned to
GiveForward to help raise several hundred thousand dollars to pay for
the care Burke received in the hospital before she died.

GiveForward
marketing director Cate Conroy told me that Burke’s friends were among
thousands of people who have turned to her organization for help to pay
medical bills. Increasingly, the people seeking help have insurance they
thought would be adequate but, because of the high deductibles or
limited benefits, is anything but.

In fact, one of the first
people to get help from GiveForward was Jessica Cowin, 28, who found out
that her policy wouldn’t cover the cost of a kidney transplant her
doctors said she needed. Her sister, Amy, put up a page on the Web site
and, within a matter of hours, donations started pouring in. She says
she probably would not be alive today if not for GiveForward and the
hundreds of people who donated money.

As GiveForward’s Ethan
Austin was quoted as saying in the news release, “There is a huge gap in
this country between what insurance covers and what people are expected
to pay when they get sick.”

The release also cited the results of
a study last year by the National Bureau of Economic Research, which
showed that 50 percent of Americans would have a hard time coping with a
$2,000 expense, such as a medical copayment. Most high deductible plans
have at least a $2,000 annual deductible. Some family plans now have
deductibles as high as $50,000, although plans with such sky-high
deductibles will be outlawed in 2014 under the Affordable Care Act.
While the law will cap the amount of money Americans will have to spend
out of their own pockets, it will not halt the trend toward
“consumer-driven” care.

As more people are moved into these kinds
of plans, GiveForward undoubtedly will become even more essential than
it is today. Which speaks volumes about the state of the U.S. health
care system.

Following a 20-year career as a corporate public relations executive, Wendell Potter left his position as head of communications for CIGNA, one of the nation’s largest health insurers, to show the world the “dark inner workings” of the insurance industry.

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